Pearth-based utility SSE has agreed to pay £1 million to a consumer redress fund after providing more than 500,000 customers with inaccurate and misleading information in annual statements.
The UK regulator OFGEM launched an investigation into the supplier in November 2017.
The investigation found that, between June 2014 and September 2015, SSE sent out 1.15 million such annual statements to 580,000 pre-payment meter customers.
Due to an IT coding error, these annual statements had inaccurate information on the alternative cheaper tariff available to customers and inaccurate estimates of how much they could save annually by switching to them.
Some statements also overestimated the annual savings the customers could make by changing their pre-payment meter to a standard credit meter paying by direct debit, as well as by moving to paperless billing.
An OFGEM spokesman explained: “Our investigation found that, whilst a large number of incorrect annual statements were issued to customers, the level of harm is low as only a small proportion of those customers would have acted on the information by switching. The average saving for each of these customers would also have been low.
“The investigation found that SSE failed to act promptly to put things right, by not identifying the issue at an early stage and by not escalating action to address it or putting in place appropriate remedial actions.
“SSE also failed to put in place arrangements and processes around customer communications that were complete, thorough and fit for purpose.”
SSE will pay the £1 million to the OFGEM consumer redress fund administered by the Energy Savings Trust, which supports consumers in vulnerable situations and the development of innovative products or services not currently available to energy consumers.
Meanwhile, OFGEM has appointed Mary Starks as its new head of the Consumers and Markets directorate.
She will oversee OFGEM’s work to protect consumers’ interests in the retail and wholesale energy markets, including putting in place a price cap for all those on poor value defaults deals.
She was previously director of competition and chief economist at the UK Financial Conduct Authority.
8 Jun 2018
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